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  • Gold is chipping away at the 50-hour average resistance.
  • A channel breakout on the hourly chart would expose Monday’s high. 

Gold is struggling to extend the recovery from the session low of $1,554.80 to levels above the 50-hour moving average (MA) at $1,561. 

At press time, the yellow metal is trading at $1,559 per Oz, representing a 0.40% drop on the day, having hit a 6.5-year high of $1,588 on Monday. 

The pullback has taken the shape of a falling channel, as seen in the hourly chart. A breakout would imply an end of the pullback and open the doors for a re-test of $1,588. 

A breakout looks likely as the hourly chart MACD has diverged in favor of the bulls by forming a higher low. 

That said, the 14-day relative strength index is reporting overbought conditions. So, a move above $1,588 looks unlikely. 

The ascending 5-day average at $1,544 could come into play if the weekly low of $1,552 is breached. 

Hourly chart

Trend: Bearish

Technical levels